Telstra, Indian companies deny 'sweatshop' claims

Telstra and its two Indian-based contractors, Infosys and Satyam, have denied using foreign "sweatshop" labour to replace Australian information technology experts.

Melbourne's Herald Sun tabloid yesterday accused Telstra of using Indian computer experts on "sweatshop wages" to do the work of highly paid Australian IT workers.

Citing an internal memo, the newspaper said the scheme would save Telstra up to $18 million a year.

Infosys Australian manager Ananda Rao said his staff, including the three people who had worked at Telstra for nearly two years, were paid at or above the going rate for Australian IT experts.

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Mr Rao said Infosys, a global corporation employing in excess of 10,000 people, would be shut down if it paid "sweatshop wages".

"Last year we attracted some 400,000 qualified applications to work for Infosys globally," he said.

"We hired 4,000 people, so only one in 100 people gets the chance to work for Infosys.

"Do you think that would be the story if we were running a sweatshop?"

Telstra also denied the claims of "sweatshop wages".

"Telstra has no intention of replacing any of its IT employees with staff of external IT providers, from India or elsewhere in the world," Telstra's chief information officer Jeff Smith said.

"IT is a global industry and like many other Australian companies and government departments, Telstra engages a number of world-leading multinational organisations to provide consulting and IT services."

The Community and Public Sector Union (CPSU) called on Telstra to guarantee no Australian IT expert would lose their job to a low-paid foreign national.

CPSU national secretary Adrian O'Connell said the union was concerned at the growing Australian trend to "export" high tech jobs through outsourcing.

"If the reports are true, then we of course we are alarmed and concerned," Mr O'Connell told AAP.

Victorian Premier Steve Bracks, meanwhile, offered state government assistance to help Telstra keep jobs in Australia.

Mr Bracks said the state government would encourage the company to employ Victorians when it retendered the work "even if that meant some short-term assistance for some long-term benefits in employment in Victoria".

Given the skills of the Victorian workforce, Mr Bracks said he was concerned by the number of Australian companies outsourcing work overseas.

Today, the second company named in the newspaper article, Satyam, also issued a firm denial.

Satyam's Asia Pacific vice president Vivender Aggarwal said his company employed only the "finest people" on wages that were at or above the market rates.

"We are in no way employing sweatshop labour," Mr Aggarwal said from Singapore.

He said less than 10 of Satyam's 70 Australian-based staff worked on the Telstra contract.

He said his company would not take any action against the Herald Sun.

Late in 2001, the Department of Foreign Affairs and Trade (DFAT) was forced to defend a report which encouraged Australian IT firms to cut costs by moving some of their services to India.

DFAT said its 'India: New Economy, Old Economy' report, launched by Foreign Affairs Minister Alexander Downer, did not advocate exporting jobs but instead was aimed at helping Australian firms boost export potential.

The report said India's low wages and high skills base gave Australian businesses an opportunity to substantially cut their wage costs while maintaining quality.